May 01 2014

Pretenders their Profits and Perils

Posted by Steve Ross in elections, SCDP

For pretenders, the profit motive may be too attractive to turn away,
but the possible penalties could put them out of business

Not a Democratic Party ballot

Not a Democratic Party ballot

In my last post, I talked about the problems of the rogue ballots being distributed at the polls.

Since that post, I’ve taken some time to search the disclosures of every Democratic candidate running for office in the Shelby County May 6th primary, to find out several things: Who’s paying, who they’re paying, and how much.

The how much is pretty startling. Of the disclosures that were available this morning for 2014 (1st Quarter and Pre-Primary) candidates have paid four vendors nearly $40,000 for inclusion on a ballot that says “Democrat” or some variant.

For that money, candidates have been promised a ballot count (the number printed), workers at the polls to distribute the ballots, and the promise of success that both of those things bring.

But all that glitters is not gold. Over the past several days I’ve driven by the most active Democratic polling locations all over Shelby County, and of those, the vendors represented vary wildly. For the ones who are there, they are more than willing to give passers by as many ballots as they want. One poll worker offered to give me the entire stack because they were ready to go home for the day (it was only 1pm).

Of course, this is one of the perils of buying a product that you can’t verify from a vendor that neither shows up in business searches at the Secretary of State’s office, or at the Registry of Election Finance.

It appears many of the vendors believe they can act with impunity, and skirt the laws that govern both business, and political activity…both of which they are engaged in.

Following the Money

Following the money on rogue ballots is not exactly easy. We don’t have online disclosure filing in Shelby County, so all you have is a PDF of the actual disclosures. If you want to search disclosures for yourself, you can start here.

Not all of the candidates that appear on these rogue ballots show expenditures on their disclosures. Some may have paid with personal checks (which is problematic), some may not have paid. There’s no way to really know. In 2012, I appeared on several ballots and I paid for NONE of them.

Another challenge is identifying which “business” is which ballot. Thankfully, I had some help in that regard, and have a high level of confidence in the information I received.

So who are these rogue ballot publishers? Let’s meet them.

Vendor Who is it? Total Paid
International Communications LaTroy Williams $14,000
Target Marketing Greg Grant $13,225
Black Magic Marketing Antonio Parkinson $7,700
Bret Thompson Bret Thompson $2,190
Unknown Disclosure not itemized $2650
Total: $39,765

You’re probably wondering who paid all this money to get on the ballots. Well, I have that information too, but its important to note, you can’t blame these folks for buying into this stuff. If they don’t pay, the vendors will get their opponents to pay…and pay any amount (more or less).

Elections are less about policy positions and more about name recognition. So if you’re a candidate that has a low profile, your mug next to folks that have a higher profile just might raise your stock…even if its fools gold.

What’s most surprising is the number of seasoned folks that bought in to this stuff. They make up 87.5% of all the money spent thus far.

Top 10 Ballot Contributors

Candidate Position Sought Amount Vendor(s)
Deidre Malone County Mayor $9,000 Black Market Strategies
International Communications
Target Marketing
Patrice Robinson District 9 $5,500 Bret Thompson
International Communications
Target Marketing
Willie Brooks District 6 $4,200 Black Market Strategies
Edith A. Moore District 6 $4,000 International Communications
Target Marketing
Wanda Halbert Criminal Ct. Clerk $2,650 Undisclosed
(appears on Target Marketing and International Communications)
Cynthia Gentry Juvenile Ct. Clerk $2,500 International Communications
Cheyenne Johnson Assessor $2,000 Target Marketing
Van Turner District 12 $1,750 International Communications
Reginald Milton District 10 $1,690 Target Marketing
Bret Thompson
Charlotte Draper Clerk $1,500 International Communications

The downside of being on the down low

Rogue Ballot Producer

Rogue Ballot Producer

For the most part, the ballot producers appear to be on the down-low. Two aren’t registered with the Secretary of State’s office in the names of the businesses they’re collecting checks in. One hasn’t collected enough money to have to file (or at least I haven’t found enough money in disclosures for him to). The one that does appear to have a business license is operated by a State Representative.

This is the first time I’ve seen Rep. Parkinson’s ballot. I was never contacted about being on it before, so I can’t say one way or the other about any high pressure sales tactics.

What I can say, is for the ballot operations that don’t have business licenses, being on the wrong side of a state/county/city that is desperate for tax and fee revenue is a bad place to be. And that’s where they appear to be…and in a County election no less. How ironic.

In Tennessee, any business whose gross receipts exceed $3,000 are required to report that income as a business to the state…pay taxes on it, as well as business licenses fees. It usually doesn’t amount to much…especially if there’s not much equipment involved, but the fines and fees for neglecting to file can pile up.

For at least two of these operators, there are years of financial disclosures out there that show them receiving piles of money for ballots. If they haven’t been reporting it, the Class D Misdemeanors…and the fines that go with them can pile up big time.

The Pretending Can Be Punishing

Aside from the potential Class D misdemeanors these Party masqueraders can rack up…the civil penalties they are most likely subject to, for operating as a political club, PAC or business engaged in electioneering and not reporting it to the Tennessee Registry of Election Finance can be steep.

Don’t believe me? Ask current County Commission candidate Berlin Boyd and State Rep. Joe Towns. Both have been assessed multiple fines of tens of thousands of dollars for instances of noncompliance.

I’m not certain what the statute of limitations is on non-compliance of financial disclosures, but considering the number of reports missed since 2010 alone, the fines could reach into six digits pretty easily.

Then there’s federal reporting. Did you know that if you pay someone more than $600/yr. as a contractor you’re required to deliver a 1099 to them for tax purposes? Considering the number of paid poll workers I’ve seen in the past several days, and the number of days of early voting for the three elections this year, its easy to believe several of these workers will pass that $600 threshold. Considering all the other reports some of these operators aren’t filing, its easy to believe they also aren’t sending out 1099’s which means the Feds could get involved and there ain’t nobody that wants that.

Conclusion

There’s no way to know if any of these operators actually make any money off the production of these rogue ballots. But its hard to imagine why they would do it if they weren’t. Considering the high pressure sales tactics involved, there must be a real profit motive somewhere.

Looking at some of the proposed production runs…and the expected turnout, its clear they don’t print as many as they say they do. Printing 200,000 pieces of anything for an election that will only have about 50,000 participants is foolish by any measure. Once you count mailing some out to cover yourself, and paying poll workers to distribute them, there’s plenty of money left over at the end to find the profit motive.

And while that profit motive may be simple enough, its complicated by the masquerade these operators engage in when they invoke the party name to sell their wares. The County Party only loses money when they produce actual ballots, because they don’t engage in a pay for play structure. They do it for the furtherance of the Party and its candidates.

Its that for-profit structure, while using a variant of the Party name that I find really offensive. These folks couldn’t sell this product on their own without the “Democratic” on there. No one would buy into it. So they have to use that word to legitimize their product. In doing so, its caused them to be sued…and could cause them more legal trouble down the road.

And for the ball to get rolling on that legal trouble, all it takes is a notarized one of these.

Funny, I just printed a whole slew of them.